Africans seek end to UK gold sales - Financial Times, Wednesday
By Gillian O'Connor Mining Correspondent
A South African delegation including Bobby Godsell,
president of the Chamber of Mines, and James Motlatsi,
president of the National Union of Mineworkers, is due to
arrive in the UK today to seek a halt to UK gold sales.
"It is time for all South Africans, indeed all Africans, to
stand together in defence of gold," Mr Motlatsi said.
The South African government is planning a second,
higher-level delegation to Europe as part of a wider
delegation of African gold- producing nations which plans
to tour European capitals to protest against the sales.
Zambia and Tanzania have already said they would join,
and Ghana and Mali have been invited.
But Patricia Hewitt, UK treasury minister, said yesterday
that Britain had no plans to alter the programme
announced in May: to sell a total of 415 tonnes of gold,
with the first 125 tonnes being auctioned during this
financial year.
The first auction of 25 tonnes took place last week, and
the second one is scheduled for September 21.
The gold price has fallen 11½ per cent, from $287.95 per
ounce before the auctions were announced to $254.65
yesterday afternoon.
There was much speculation yesterday that another
central bank was selling, or planning to sell, gold through
the market.
Talk of further sales appears to be based on the fact that
short-term lease rates for borrowing gold have risen
above longer-term rates since the Bank of England's May
announcement, and remained there even after the first
UK auction. One-month rates have risen from 0.5 per
cent to 3.3 per cent, while one-year rates have gone up
from 1.4 per cent to just over 2 per cent.
This shortage of immediate liquidity is compatible with a
central bank reducing the amount of gold on loan to the
market, but analysts emphasised yesterday that there
could be other reasons for the increase in lease rates. |
